What to Ask Your Insurance Agent Before Adding Living Benefits

Adding living benefits to your life insurance policy can provide peace of mind and financial security during a serious illness or health crisis. But before you move forward, it’s important to ask your insurance agent the right questions to ensure the policy meets your needs and expectations. Here are the key questions to ask:

1. Are Living Benefits Included in the Base Policy or Do I Need to Add a Rider?

Not all policies include living benefits by default. Some require you to add a separate rider, which may involve an additional cost. Ask if the living benefits are built into the coverage or if they need to be added manually.

2. What Health Conditions Qualify for a Living Benefits Payout?

Insurers have specific criteria for what qualifies as a critical, chronic, or terminal illness. Ask for a list of covered conditions and make sure they align with your concerns or health history.

3. How Much of the Death Benefit Can Be Accessed Early?

The amount available through living benefits varies by policy. It may be a fixed percentage or depend on the severity of your condition. Find out the maximum amount you could receive and how it will impact the remaining death benefit for your beneficiaries.

4. Are There Any Waiting Periods or Restrictions?

Some policies include waiting periods before you can use living benefits. Others may have exclusions based on pre-existing conditions. Be clear on how soon after the policy begins you’ll be eligible to file a claim.

5. How Does the Claims Process Work?

Ask what documentation is required to file a claim, how long the process takes, and whether approval is based solely on a doctor’s certification or involves further review. A straightforward process can make a major difference during a health crisis.

6. Will Using Living Benefits Affect My Premiums or Coverage?

Find out if using the living benefit will impact your monthly premium, the policy’s value, or eligibility for other benefits. Some policies may reduce future options if the rider is used.

7. Are There Any Fees or Charges for Using the Benefit?

While many living benefits are available at no upfront cost, some policies may charge an administrative fee or interest on any early payout. Clarify all possible costs before signing.

8. Can I Customize the Living Benefits Rider?

Some insurance providers allow you to tailor the rider based on your priorities—such as adding long-term care support or adjusting the conditions that trigger a payout. Explore any customization options.

9. What Happens If I Never Use the Living Benefits?

Confirm whether unused living benefits impact the policy in any way. In most cases, they don’t affect the death benefit if never accessed, but it’s worth verifying.

10. How Will This Affect My Estate Planning or Taxes?

Ask whether early payouts have any tax consequences or affect Medicaid or other income-based benefits. A qualified agent or financial advisor can help you plan accordingly.

Final Thought

Before adding living benefits to your life insurance policy, ask these key questions to make sure you’re getting the right coverage for your situation. A knowledgeable insurance agent should be able to walk you through all the details so you feel confident and informed. With the right information, you can make a choice that protects both your present and your future.